DEFUNCT Bulawayo-based tyre manufacturer Auto Tyres Zimbabwe needs about $12 million working capital to resuscitate operations, an official has said.
Formerly, Dunlop Zimbabwe, the giant firm stopped production at the end of 2016 citing working capital and foreign currency constraints to procure critical raw materials.
Confederation of Zimbabwe (CZI) Matabeleland Chapter president, Mr Joseph Gunda, told participants at a breakfast meeting on Special Economic Zones held in Bulawayo on Wednesday that efforts were underway for Auto Tyres Zimbabwe to resume production.
“Dunlop produced its last tyre I think in December 2016, and they closed shop. They require about $12 million working capital to resuscitate operations. And because of the change over in hands a lot has happened as they got into partnerships,” said Mr Gunda.
“I think you can get more details of what’s happening at the company, but a lot has happened.”
Last year, the firm was reported to have acquired modern tyre-making equipment envisaged to go a long way in enhancing competitive production once operations resume. Under a new name, the company was expected to resume production at the beginning of the year.
“Investors are now required and the $12 million is now required to kick-start that company,” said Mr Gunda.
An indigenous company, Zoomway (Pvt) Limited acquired 51 percent shareholding in Auto Tyres Zimbabwe in April 2016. Previously, the local tyre producer was a subsidiary of Apollo Tyres. The tyre manufacturer was seeking working capital to resume operations using a lean production model that reduces costs.
At its peak, Dunlop Zimbabwe used to employ up to 2 000 people directly with significant impact downstream along the value chain. Due to its closure, Zimbabwe is relying on imported tyres on the back of the demise of local manufactures, and the trend is also contributing to the high import bill, which the country was grappling to contain.
It is hoped that the revival of the tyre giant would not only rejuvenate the Belmont industrial site but also create thousands of job opportunities beyond the previous employment levels.
Before its closure, Dunlop used to export to countries such as Zambia and South Africa. Meanwhile, earlier in his address at the breakfast meeting, Mr Gunda said the closure of Zisco and the scaling down of operations at the city’s largest employer, the National Railways of Zimbabwe among other companies has crippling industrial activity over the years.
Before the massive de-industria-lisation, Bulawayo once the country’s industrial hub, housed headquarters of large companies in the mining, engineering, and textile sectors. Such firms included the Zimbabwe Engineering Company (Zeco), Hubert Davies, Radar Metal Industries, National Blankets and G&D Shoes among others.